Laid Off Employee Sued for Constructive Dismissal

April 26, 2013

A 55 year old long term employee sued his employer for constructive dismissal on account of being laid off. Although the Ontario Employment Standards Act allows temporary lay-offs, at common law, in the absence of a lay – off provision in a written employment contract, an employer can not lay – off an employee. When the employer realized that it was not allowed to lay – off the employee at common law, the employer called the employee back to work. The employee refused to return to work claiming that the work environment was hostile and intolerable.

Both parties agreed that that the employee was constructively dismissed when he was laid off. The calculation of damages was based upon 16 months subject to whether the employee was required to mitigate his damages by returning to work. The Court accepted the employer’s evidence and concluded that the work environment was not intolerable. The Court found that where the working conditions are not substantially different and the working relationship is not hostile, an employee should resume employment if given the opportunity. The Court referred to the Supreme Court of Canada’s decision in Evans v. Teamsters Local Union No. 31 which set out the factors to determine whether a “reasonable person” would have accepted the opportunity to return to work under these circumstances. Given that the employee should have returned to work and he refused to do so, he failed to mitigate his damages. Therefore, the employee was not entitled to any damages for lost wages. The Court dismissed his action.